SEC integrates payment app with online filing

The Securities and Exchange Commission last month retired one of its last legacy systems, winding up the final phase of modernization of the Electronic Data Gathering, Analysis and Retrieval system.

The system shuttered'the Entities, Filings and Fees System'calculated and kept track of fees owed by public companies, mutual fund managers, investors, securities brokers and dealers.

But after Jan. 22, the need for EFFS disappeared, said Rick Heroux, EDGAR program manager at SEC's Office of IT.

The commission moved the EFFS data to EDGAR, making 5 million records accessible to SEC users, he said. SEC upgraded the EDGAR corporate and filing system in April. The system now uses Momentum Version 3.5 software from American Management Systems Inc. of Fairfax, Va., to perform calculations.

BDM International Inc. started the three-year, $22.5 million modernization in 1997. Later that year, TRW Inc. bought BDM and took over the project.

Lighten the load

Through the EDGAR modernization, SEC wants to reduce the filing burden on companies required to submit financial data to the government.

The commission has extended TRW's operations and maintenance contract, valued at $9 million, to June.

'Now we have a totally modernized accounting system that keeps track of the money,' Heroux said.

Some filings require the user to pay a fee. EDGAR software checks to see if the user's account has sufficient funds to cover the filing. If it does, the filing process continues.

If the funds are not available, the filing is suspended, and the system checks the user's bank account for the next 24 hours to see if the funds are replenished and processing can proceed.SEC employees keep track of the blocked filings, Heroux said.

'We can call the filer and remind them they will have to refile if the money does not show up before the 24-hour limit has expired,' he said.

Starting last month, SEC also began sending e-mail verifications that it has received documents from users who submit paper filings.

Though the modernized EDGAR requires all users to file electronically, some documents may be filed on paper if, for instance, a user is having computer problems, Heroux said. Some foreign companies and individual filers also use paper.

'Previously, there was no way that the filer would know whether his filings are with the SEC or not,' Heroux said. 'This is the first time that they will get a notice that SEC has received the filing.'

To do this, the agency upgraded its dissemination software, written in Java.

Deborah Bortner, director of securities for the Washington Department of Financial Institutions in Olympia, Wash., and a longtime user of EDGAR, said the system has come a long way.

The upgraded system gives users access to a company's financial reports within hours; the former system took months, she said.

But Bortner did have one complaint: Although the search engine is faster and files are easy to download, the reports remain difficult to read.